CHAPTER 4

Pre-foreclosure

A Pre-foreclosure is a situation where a default loan has taken place; hence the lender has begun a judicial or non-judicial proceeding. The property becomes subject to foreclosure. Pre-foreclosures still belong to the owner.

Pre-foreclosure is sometimes known as Lis Pendens (lawsuit pending) in states that conduct judicial proceedings. To avoid losing their homes to foreclosure, and losing their equity and damaging their credit, troubled homeowners would always prefer to sell their homes as quickly as possible, at a very low price. The foreclosure rate is soaring in most areas of the country presenting incredible opportunities for pre-foreclosure real estate investors! There are a number of ways the informed real estate investor can profit from homes facing foreclosure and one of the most lucrative is the pre-foreclosure.

There is less competition in buying pre-foreclosures than there is when buying at foreclosure auctions. Some people do not know how to find pre-foreclosure or probate property opportunities, and some people fear dealing and negotiating with lenders.

Stopping a foreclosure helps to save the owner’s credit rating, help lenders to recover their money and also helps you in getting a profitable deal.

There is no single law or procedure covering all foreclosures in the United States. Each federal and local government agency applies different rules. However, learning this procedure is not difficult, and once you go through buying a pre-foreclosure home, then you are in the game forever!